The Eritrean diaspora tax was condemned by the UN security council in 2011 'because it was being used to fund arms and related material'. Photograph: Alamy

On the morning of the 18 December last year Sam* walked up the narrow steps of a nondescript building in the back streets of Islington, north London. He was visiting the Eritrean embassy to inquire about his "clearance". This is the process every Eritrean in the diaspora must undergo if they want to have any dealings with their home country.

However, being cleared entails paying a 2% tax on all UK earnings to the Eritrean authorities. Without clearance Sam could not have his passport renewed, apply for a business permit in his home country, or even send a parcel of secondhand clothes to his family.

These included the Somali militant group al-Shabaab, an al-Qaida affiliate. Eritrea supported al-Shabaab as an indirect means of attacking Ethiopia, its long-standing enemy.

In May 2011 the Foreign Office notified the Eritrean authorities that "aspects of the collection of a tax levied by the Eritrean government on Eritreans living in the UK may be unlawful and in breach of the Vienna convention on diplomatic relations. The ambassador was told that until it was demonstrated otherwise the embassy should suspend, immediately and in full, all activities relating to the collection of the tax."

Despite this warning, the Foreign Office is aware that pressure on British Eritreans to pay the tax has continued. Lady Warsi, the senior minister of state at the Foreign Office, confirmed in a written reply to Lady Kinnock that the Eritrean ambassador had been warned he must comply with the resolution to desist from illicit means of collecting revenue from members of the Eritrean diaspora in the UK. "On 20 December 2012, Foreign and Commonwealth Office officials raised these concerns with the Eritrean ambassador and reminded him of UN SCR 2023," Warsi wrote.

Yet a year later, when Sam arrived at the embassy, he was informed he had no option but to pay the illegal tax. "If you have anything to do or there is any query," an embassy staff member told him. "You will have to pay it all and get clearance. You will not be able to do anything without clearance."

"We are aware of allegations over the use of harassment to collect revenue from members of the Eritrean diaspora in the UK," Warsi wrote. "On 20 December 2012, Foreign and Commonwealth Office officials raised these concerns with the Eritrean ambassador and reminded him of UN SCR 2023."

The sums involved can be substantial. Tax is claimed when an Eritrean turns 18 – even students are expected to contribute £50 a year. Upon reaching adulthood, Sam was told he had to pay the full tax. "However, after [reaching 18] and until 2013 you need to bring a payslip, a P60 or anything that indicates your income. When you come with all these documents, then you can pay the 2% tax."

Backpaying 17 years of taxes would have been a huge burden for Sam, who has a young family to support. "I need to get a mortgage to pay all this," he joked with the embassy staff as he turned to leave. Having no intention of paying the tax, he had secretly recorded the entire exchange on video.

The allegation that staff continue to demand payment of the 2% is supported by receipts obtained from other Eritreans, dated after May 2011, when the practice was outlawed by the UN.

The taxation of the Eritrean diaspora, many of whom live just above the breadline, has been challenged by a group of Eritrean women. Team Eritrea, as they are known, are requesting that the British government ends its toleration of the illegal tax. "It is extortion from some of the poorest people in our community, who just want to help their families back home," says Feruz Werede, who is leading the campaign.

But the campaigners want the Foreign Office to go further. They are calling on the British government to follow the Canadian example and expel the Eritrean ambassador. In May 2013, fed up with repeated – and false – assurances from the Eritrean authorities, Canada's foreign affairs minister, John Baird, expelled the Eritrean consul in Toronto, Semere Ghebremariam O Micael, declaring: "Today's actions speak for themselves."

The UK diaspora fears the extortion will continue unless decisive action is taken. Eritrea is among the most repressive countries in the world, and the funds sent from Britain through this tax assist the regime in maintaining its hold over the beleaguered population.